"One of the most surprising reasons for choosing a specialist lender, which you may not have considered before – is service."
It’s true that most specialist lenders will have specific expertise in working with customers with adverse credit, but there is so much more to us than that. We are here to meet the individual needs of an increasingly diverse group of customers whose lifestyles and income profiles make it hard for high street lender to make a decision on their mortgage based purely on an algorithm. Specialist lenders are here for any customer circumstance that needs individual assessment and more considered underwriting. Some lenders have called it ‘real life’ lending, which is accurate because real life isn’t straight forward, and that doesn’t just mean people hitting a bump in the road with credit problems.
For example, at Pepper Money, overall 40% of our lending last year was to customers with a CCJ or default. However, looking closer at our Pepper 60 and Pepper 48 products we can see that 63% of lending was to customers without a CCJ or default.
So, if many of our customers don’t have CCJs or defaults, what are their reasons for working with a specialist lender? Last year, we significantly increased our mortgages for buy to let investors. However, the majority remain, residential customers, and for those customers, it was complexities with the way they earned their income or factors which lead them to a lower credit score which saw them overlooked by the high street.
For example, last year 38% of our lending was to self-employed customers, and Pepper Money was singled out for special mention in our approach to calculating affordability for self-employed customers by Mortgage Broker Tools. On top of this, 9% of our lending was to customers with multiple sources income.
We also identified one in two of our remortgage homeowners took the opportunity to consolidate debt as concerns grow due to inflation and the cost of living. We allow up to our maximum LTV levels, and we have no maximum limits on outstanding levels of debt.
One of the most surprising reasons for choosing a specialist lender, which you may not have considered before – is service.
A consistent theme with all of our customers is the need to deliver timely decisions. Irrespective of the consumer type, the current economic climate means that customers are going to be more concerned with service as they crave certainty and need decisions from brokers and lenders faster than ever before.
Within 24 hours, we are able to assess documents, portal messages, and undertake an underwriting assessment. This year so far, one in four customers received an offer within 14 days. Our quickest completion was just five days and, where brokers do need to contact us, either with a sales enquiry or to speak to their dedicated case owner, all calls are, on average, answered in less than one minute.
It's time to think again about specialist lenders. Customers come in all shapes, sizes, needs and circumstances – and our job is to cater for those circumstances. It’s your job, as the adviser, to put them in the picture and empower them to get the mortgage they need. As a lender, we offer a diverse range of buy-to-let, residential and affordable home ownership mortgages, but we recognise that there is opportunity for us to do more. Over the coming months, at Pepper, we’ll continue to explore how we can work more collaboratively with our broker partners to identify, understand and ultimately support more customers to fulfil their property dreams, whatever their circumstances.
